Liquid Media’s (NASDAQ: $YVR) Virtual Reality Could Come True

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If Liquid Media (NASDAQ: $YVR) successfully executes their push in positioning their streaming site Reelhouse as a trailblazer for VR streaming, we could see their valuation skyrocket.

Liquid Media Group (NASDAQ: $YVR) is a studio that produces content for different platforms including film, TV, gaming, and VR.

The entertainment industry has seen a tremendous shakeup in the last decade only. Traditional radio and television have been pushed out by streaming and on-demand services. That trajectory is only intensifying.

Early indications and top research lead us to believe that entertainment in the future will be significantly more interactive. Virtual Reality and Augmented Reality technologies have the power to completely immerse the user into the media experience.

 

Technological innovations are leading to new ways of consuming entertainment


Just like Netflix changed the industry with streaming, several companies including Liquid Media, are investing heavily in VR/AR future.

Liquid Media has, as part of an aggressive growth strategy, been acquiring several revenue-positive studios, including 2D/3D animation, motion capture, and game developers.

The company’s key objective is to develop a rich portfolio of intellectual property with a quality-driven long-tail revenue stream. In their deals, Liquid Media focused on acquiring top talent and high ROI opportunities.

In early 2020 they acquired a portfolio of streaming assets, including Reelhouse Live and Slipstream, both niche streaming tools that help empower content creators and independent filmmakers.

Reelhouse Live allows the audience to directly connect with creators. Slipstream is a smaller streaming website with an emphasis on smaller sports stories.

To provide VR content for Reelhouse, Liquid Media extended its partnership with YDx Innovation Corporation (TSXV: $YDX). Additionally, they partnered with Arcana Studio, an animation studio, providing access to a number of titles to stream on Reelhouse.

This indicates $YVR’s commitment to developing Reelhouse as a main VR streaming channel, delivering the product directly to the customers.

In April, Michael Timothy Doyle, former head of 20th Century Fox Interactive, joined Liquid Media Group as a part of the advisory board. Doyle is a veteran within the entertainment industry with lots of hands-on experience of contributing to staple pieces in the industry, like the movie Avatar and video game franchise Alien.

To finance their growth, Liquid Media offered in June a Registered Direct Offering, raising $4M at $1.5 a share.

The offering additionally included 5-year warrants exercisable at $1.88 per share.

During this economic downturn, many public companies are turning to a Registered Direct Offering (RDO) to raise capital when traditional public offerings and private investment in public equity (PIPEs) are not feasible.

What it effectively means, is that Liquid Media asked their backers for more money. 

According to their filing, close to $200.000 of the proceeds would be spent on outstanding debt. The remaining net proceeds would go towards “working capital, expanding existing businesses or acquiring or investing in businesses, debt reduction or debt refinancing, capital expenditures and other general corporate purposes”.

Growth, innovation, and R&D all cost money.

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Liquid Media Group has shown net losses throughout the past four financial years.

When you are a young company with a weak revenue-generating capability, with outstanding debt, in an expensive industry, and also needs to grow – the race is real – and bankruptcy is only a few missed debt payments away.

We see four key catalysts to watch:

    1. Expansion of virtual reality capabilities of Reelhouse,
    2. Expansion of films with different languages to enter into international markets,
    3. Development of AA titles, or even Triple-A games.
    4. Higher demand and research progress in the area of VR.

 

If Liquid makes a push forward during this time of pandemic with their streaming site Reelhouse as a trailblazer for VR streaming, we could see the valuation skyrocket.

 

Avatar
Luka Marjanovic

Partner

Luka holds a Bachelor’s in International Business and a Master’s in International Management. During his undergraduate studies he worked as a research assistant in the field of Big Data; founded his own consulting firm providing services to local SME's in various sectors and invested in the capital markets; as well as working pro-bono providing education and career counselling. Prior to his business education, he studied Biology-and-Biotechnology, and served in the Danish Royal Army as Second Sergeant, leading and managing a group under extreme conditions and pressure. Luka has spent significant time abroad, living and working in seven different countries. When he's not in the office, he's chasing the next gusts windsurfing, carving the mountain snowboarding or out in the forest for a jog.

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